Once-troubled Downers Grove office buildings for sale

Two west suburban office towers that became zombies after the economic crash are up for sale, a little more than a year after their previous owner, a Middle East investment fund, gave them back to the lender.

The Chicago office of Pittsburgh-based real estate firm HFF Inc. has been hired to sell Corridors I and II in Downers Grove.

A venture backed by the Kuwait-based Global Investment House defaulted on a $53.4 million loan on the two towers, located at 2651 and 2655 Warrenville Road in Downers Grove, and a Virginia office property when the debt matured in August 2011, according to a report about the loan from Bloomberg L.P. Caught up in the recession, the occupancy rate had plunged to 33 percent, and the Kuwaiti venture didn't have enough cash to attract new tenants, turning the buildings into what some brokers called zombies.

Three months later, in November 2011, the Global Investment entity transferred the towers to a venture of Miami Beach, Fla.-based LNR Partners LLC, public records show. LNR is a so-called special servicer that manages troubled loans like the Corridors properties that were packaged and sold off to investors.

Global Investment House in 2005 purchased Corridors I and II and a Sterling, Va., office property, in a deal that valued all three buildings at $70.1 million. The Kuwaiti fund was advised by Chicago-based real estate investment management firm Heitman LLC. A Heitman spokesman declined to comment.

Global Investment has struggled in the wake of the financial crisis, defaulting on a majority of its debts in early 2009, according to press reports. Later this year the company will delist its shares from the Kuwait Stock Exchange. A spokesman for the firm did not return a call and an email seeking comment.

An LNR spokesman had no immediate comment. The firm has hired HFF to market the properties, according to a news release. An asking price was not disclosed.

The buildings, both five stories with 149,896 square feet each, have struggled to find tenants. Corridors I is 76 percent leased, according to the news release, to tenants including hospital billing firm Optimum Outcomes and an AmeriQuest Business Services Inc. office.

Corridors II is just 26 percent leased, to a venture affiliated with Schaumburg-based American Intercontinental University.

The properties present “investors with a unique opportunity to acquire very well-located, Class A office buildings that are less than 15 years old in a desirable suburban market,” HFF senior managing director Jaime Fink said in the release.

Mr. Fink, along with HFF's Jeffrey Bramson, also a senior managing director, and director Mark Katz are handling the sale for LNR.